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Hello traders and investors
and welcome to another episode of the Week ahead
This week, 10th of February, 2014.
We have a lot of topics we'll be discussing. There is
the Auto Sector which is the hot sector for this week
there is also a lot happening on the government side through reforms and
announcements,
which we will be covering. And of course this is
earnings season so we will be going through quarterly earnings
of India Inc. My name is Prateek Singh,
let's get started. So the RBI's repo rate hike
which triggered a bear market on the Nifty futures and the market
is now sending shockwaves this week as well.
Monday and Tuesday were both down days and the rest of the week we recovered
those losses so on a week on week basis
this was actually only a 10 points loss on Nifty futures
but do remember that the higher time frames still suggest
that we are in a bear market so your strategies should be
on the short side of the market or the sell-side of the market
this is and continues to be a sell on rise
market. I also wanted to quickly go over
the Rupee. You see there was a time when the
only thing economists used to talk about was the Rubee
and how it's creating havoc and how it's depreciated and how it's oh so
bad for the economy. Now, they are mum completely.
But this is actually a good thing. You see the RBI has been able to
tame the pull of the depreciating rupee completely. And we've seen a range of
only 61 to 63. You see
a stable currency is very good for our country
because it shows confidence to foreign investors
they would prefer to invest in the country which has a stable currency
rather than a more fluctuating one since Raghuram Rajan's
entry as the governor of the RBI, the Rupee has seen
little swing. However, I would like to add that his
entry could not be more well-timed. He joined in
middle of September and that's exactly the time
when the downtrend we were seeing in the market reversed
to a beautiful uptrend. The Nifty went from the lows of 5,100
all the way to 6,470. Not bad at all.
And the Sensex gained about 4,000
during the same period. This also
of course helped in draining in the rupee depreciation.
With be equity markets now in in a possible medium-term slump
what remains to be seen is what happens to the Rupee.
So that's a story we will be closely following and monitoring
and giving you more information about. Now since we are in a downtrend
wouldn't it be interesting to see some stocks which are actually moving up If you
go through
any large cap stocks you'll be seeing nice rallies followed by huge declines
meaning a downtrend. But there are a few stocks that are higher for you today
which are actually still in an uptrend. You might want to have
them on your watch list. The first one I've got for you
is Apollo Tires. It continues to be in an uptrend.
Do remember its earnings results will be out
later this week so you might want to keep an eye on that. The second stock
I have for you is ABAN Offshore. Do remember
that this is slightly on the upper side problem
uptrend band so maybe it's not a good time to invest
you might want to wait for a little bit of a decline before you make your
decision to invest or not.
The third stock is BharatForge. It's a beautiful
uploaded glide is what I like to call it stock with no
erratic movements and fourth, of course, I have to pick something from the
IT pack which is HCL which is still moving
upwards along with Infosys Technologies
which I might say is not as beautiful as BharatForge
but still is in an uptrend to these are a few stocks
you might wanna have on your watch list. Here is also
a small bear market tip. If we continue to be in a bear market
remember you will always get spiky moves
up followed by the continuation of the move down. For example, Ranbaxy
saw a spike up. It's not a good idea
to buy stocks were just spiking up within a downtrend
even if there is a positive news. Because if there are sellers on the way up
no matter how positive the news is it's not going to bring in long-term
investors
putting in much bigger amounts of money to sway the move upwards
so that's something you want to keep an eye on.
Now another piece of interesting news has been from the finance
Minister P Chidambaram he suggested a move that will streamline
demat accounts. He has asked for a single Demat account to hold all
financial assets. This will streamline the process
and provide more simplicity for the Indian investor.
Now as we know the US affects all markets
around the world the emerging economies as well as the developed countries
now there is one important economic indicator that happens once a month
on the first Friday and that is happening this week
the announcement is the employment data. Now if they are strong numbers
posted this Friday
you can expect a rally to probably shockwave throughout the world
because the US will most probably respond
positively and if there another quantitative easing tapering
it will further move
the US economy upwards which is actually not very good news for
India because we need to constantly come up with more
factors so the foreign entities invest in
our land in India rather than other countries.
There is another interesting announcement by the RBI.
There was a strong rumor sometime back that there was
fake currency being circulated in the country to
devalue the Rupee. Now if this is true,
what the RBI has done is a counter measure. It has anounced that
any note before 2005 will have
no value up to this 31st March,
2014 so you might want to get to get your notes changed in case you have any
pre 2005 monies in your hand. Now let's get to this week's hot sector
The Auto Sector! Now you might not know this
in the last 11 years the auto industry has never posted
a slump; never posted a negative number
until now we've seen a first
decline in 11 years this time
and this is mostly because of interest rates being high
inflation and cost factors generally to keep up
a car in India now costs much more than it did, and of course rising
fuel prices. So the question is how bad
really was it? Tata Motors saw a 40% decline in December
on number of sales. That's a big one. Mahindra and Mahindra
was not too far, posting a 27% decline.
Now there are other companies which have actually posted
positive numbers, but overall as an industry
as the sector we have seen a decline. But the question is
what's going to happen in the future? What can we do
to bring back interest? And one way is definitely an Auto Expo which
is happening right here in Greater Noida
the Auto Expo 2014. Now there have been a lot of announcements in the Auto Expo
from the luxury segment in the compact even the second Sedans.
We've seen improvement in prices, features,
fuel efficiency, and the list goes on. But there is one
stock in particular which is Maruti Suzuki.
They've announced a new car called the Celerio.
Which is priced at around 4 lakh rupees and is a compact car.
It is fuel-efficient, but get this: it is automatic transmission.
You might want to keep an eye on Maruti Suzuki stock
which has seen a slump recently let's see how this announcement
effects the company. So what is the government doing
to help out? Well Praful Patel, who is the Minister of heavy industry,
has suggested to the finance minister mister Chidambaram
to bring down the excise duty from the current
12 percent to a suggested eighty percent
Now, this is is on commercial vehicles and if this happens this will definitely
be a stimulus for the sector so you might want to keep an eye on whether
this announcement makes it and this reform
actually happens. And just like the last three weeks this is
earnings season so let's see what India Inc has to offer for its quarterly
earnings if you're wondering how you can profit
or benefit from these announcements you want to click on this link
which will take you to a video in which we discussed on how earnings season can affect
stock prices.
So let's start with Monday! Monday
Tata Motors, Apollo Hospitals, Essar Oil among other stocks.
Tuesday has Indian Hotels, Tata Steel,
and Dr. Reddy's among other stocks as well.
Wednesday is actually a long list of companies
releasing their quarterly earnings including Apollo Tyres, Bata India, Cipla,
Hindustan Copper,
and Coal India. Thursday
has Hindalco Industries some pharmaceuticals which have performed very
well on the price charts
and ONGC. Friday
does not have a very long list when compared with Wednesday
but on Friday we have Britannia Industries
Unitec, Steel Authority of India and Rural
Electrification Cooperation announcing its quarterly earnings.
Finally, you have to keep an eye on inflation numbers due to a lease on 14th
February,
2014 on Friday it also happens to be Valentine's Day so let's hope that this
date of inflation with the market's does not go sour.
Analysts are expecting around 6% for the inflation figures to
come
or lower. If it is lowr that would be very
healthy for the economy so that's it for this week's market outlook
I will see you again next week with more information
my name is Prateek Singh and have fantastic
week ahead!